AppleInsider Staff
Apple has produced TD-SCDMA-based iPhone prototypes to test on China Mobile's network, industry sources have told Shaw Wu of Sterne Agee. And the carrier remains in discussions with Apple about a future deal.
But despite all of that, Apple is apparently not in a hurry to provide the iPhone officially to China Mobile subscribers. Instead, he said, effort is focused on developing a 4G TD-LTE iPhone, so that a future hardware upgrade with high-speed 4G data will be compatible with China Mobile.
The problem stems from China Mobile's proprietary 3G TD-SCDMA network, which would require that Apple build a unique iPhone for compatibility. It's a similar problem in the U.S., where T-Mobile's proprietary 3G GSM network does not work with any of Apple's iPhone models.
Even without an official agreement in place, there are already 10 million unlocked iPhones on China Mobile's network. Those users rely on both Wi-Fi and China Mobile's slower 2G EDGE network for data.
Wu noted that China Mobile has also been enticing iPhone users to use its network by offering free gift card promotions with Wi-Fi service. China Unicom is currently the only official provider of the iPhone in China.
China Mobile remains the largest prize for Apple in terms of carrier partners. The company has more than 611 million subscribers, representing a huge, largely untapped base of customers that Apple has yet to reach.
Even China's other major carrier, China Telecom, is also rumored to get into the mix. Last month one report claimed that China Telecom is expected to gain access to the iPhone around mid-2012.
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16 Comments
it does not make senses to have a separated td-scdma iphone. lte will resolve the issue, so china mobile can just wait.
one of the main reasons that there are so many iphones on china mobile's network is that china mobile is the earliest mobile carrier in china and many customers do not want to change their cell phone number. somehow china unicom requires a new number for its iphone purchase. i don't know why they do this way, but if this restriction can be removed, more will flood to china unicom for iphone.
it does not make senses to have a separated td-scdma iphone. lte will resolve the issue, so china mobile can just wait.
I don't think it makes sense to sell 250M iPhones in 2012that would contain chips for TD-SCDMA'3G' and then later TD-LTE '4G". Luckily for vendors China Mobile is so fricken large and doubly lucky for Apple the iPhone is so popular on their network, even with just GSM '2G' access that it would well warrant the development of a new iPhone for Chian Mobile the way it warranted development for Verizon Wireless.
it does not make senses to have a separated td-scdma iphone. lte will resolve the issue, so china mobile can just wait.
one of the main reasons that there are so many iphones on china mobile's network is that china mobile is the earliest mobile carrier in china and many customers do not want to change their cell phone number. somehow china unicom requires a new number for its iphone purchase. i don't know why they do this way, but if this restriction can be removed, more will flood to china unicom for iphone.
You can't say it doesn't make sense without giving some numbers. There is a fixed investment cost for Apple to make a phone with new hardware inside. The two companies could certainly come to an arrangement whereby it would make sense for Apple to make a new model. It was said that a Verizon iPhone would never make sense either, and yet here we are.
600 million users is a hell of a lot. If Apple got 10% of those that would be 60,000,000 x $600 or so, which is $36 billion in revenue, about $20 billion in profit. You don't think the development of a TD-SCDMA phone would cost Apple 20 billion, right? What, maybe Apple only gets 5%? I doubt they'd be crying for only 20 billion in new revenue.
Apple now knows the cost of leaving a market out in the cold from the iPhone. I believe the lack of an iPhone on Verizon is the reason Android is a player in the market. Apple will do the math and if CM makes it worth their while (perhaps by guaranteeing sales of a certain number of phones) then the deal will be made.
.... $36 billion in revenue, about $20 billion in profit.
How do you come up with that (56%), considering that Apple's profit (net income) margin is ~23% - 24%?
600 million users is a hell of a lot. If Apple got 10% of those that would be 60,000,000 x $600 or so, which is $36 billion in revenue, about $20 billion in profit.
I think 10 million iPhones on a network of 600 million users is a 1.7% saturation rate for a device that has is not officially sold and only works on '2G'. Not to shabby.